Columbia Sportswear Company delivered a record for its first-quarter sales and beat analyst’s earnings estimates.
Net income for the quarter rose 20 percent to $31.8 million, or 45 cents a diluted share, up from $26.5 million, or 37 cents, a year ago. This easily beat the FactSet estimate for earnings of 33 cents a share. This was a first quarter record that was aided by a tax benefit of $4.1 million.
Sales for the three months ending March 31 increased 10 percent to $525.1 million from $479 million a year earlier. This was also a record for Columbia and topped the FactSet estimate for sales of $494 million.
“Our diverse brand portfolio drove strong growth during the first quarter, including high 20 percent growth in our U.S. direct-to-consumer channels and low-teen percentage growth in our U.S. wholesale channel,” said chief executive officer Tim Boyle. “The Columbia, Sorel, prAna and Mountain Hardwear brands each generated double-digit percentage constant-currency net sales growth in North America.”
Sales increased in the U.S., Europe, Africa and the Middle East. Sales declined in Latin America and Asia Pacific. Global Sorel brand net sales increased 35 percent and global prAna brand net sales increased 12 percent. Gross profits slipped slightly from 47.8 percent in 2015 to 47.1 percent for the same period in 2016.
This year, the company is looking for gross margins to improve by up to 30 basis points. Net sales growth is projected to be in the midsingle digits. Net income is forecast to be between $184 million and $191 million, or $2.60 to $2.70 a diluted share. The Capital IQ estimate is for $2.67 and net income of $185 million.
The company generated $97.0 million in operating cash flow in the quarter, and finished the quarter with $451.2 million of cash and short-term investments, compared with $454.5 million at March 31, 2015.
Boyle went on to say, “Our strong balance sheet gives us the financial flexibility to continue to make carefully considered long-term strategic investments to position the company to drive profitability.”
Columbia stock is up 11 percent for the past six months and lately traded at $60.16.